MY NEXT TWO STOCKS FOR MY IRA ACCOUNT

I revised my automatic stock purchase plan for my IRA account to purchase my next two dividend stocks.  The newest additions to my IRA will be Eli Lilly (LLY) and Pfizer Inc. (PFE).  Both are well known corporate brands with great dividend yields and have a long history of paying dividends.  I believe that both companies will be around for years to come and will make good additions to my investment portfolio.  The purchase of shares in these two stocks will add a total of 8 dividend payments per year towards my goal of 365 days of dividends. 

MY NEW INVESTMENT PLAN BEGINS PAYING OFF!

Collected some of my first dividend payments from stocks purchased for my new investment plan.  This weeks' payments included dividends from Duke Energy (DUK), Solutia (SOA) and Realty Income Corp (O). 

While Solutia is by far my longest held stock, they just recently started paying dividends again.  I held this stock through bankruptcy and have patiently waited to see if they would make any progress.  So I'm really glad to see a little income from them once again.

Duke is one of my recent purchases as part of my Daily Dividend Investment Plan.  That's part of the beauty of the plan.  While I'm accumulating shares in a total of 92 dividend stocks so I can collect a dividend for every day of the year, I'll see cash flow increasing every month as I start collecting payments from my newest purchases.  Talk about positive motivation!

Realty Income Corp is a REIT which pays monthly dividends.  While I wouldn't go overboard with REITs or MLPs, they do have a place in income portfolios.  Both REITs and MLPs are attractive to dividend investors for their high yields, however along with high yields come high risks.  So investors should keep that in mind and do their homework before investing.

One thing I want to stress, anything I write in concerning my personal investments or investment plan, should not be construed as a recommendation for others.  If you get some ideas to apply to your own investment plan, I'm glad I could help.  If you have ideas you'd like to share, I'm all ears.  Never get tired of talking about investing and learning new ways to make money :0).

Have a great weekend!

GETTING ORGANIZED FOR MY BIG INVESTMENT PROJECT

In order to focus my attention on my 2 year portfolio building project, I spent the weekend getting organized at home.  Got caught up on all my yard work, cleaned and organized my apartment.  Had to get my old bedroom cleaned up and dried out for the painters.  My landlord finally got the roof fixed and they plan on repairing my apartment first.  I thought it would speed things up a bit, not to mention making things more comfortable for myself, to get everything ready so they can come in and get the job done as quickly as possible.

It's been quite an ordeal, dealing with the water leaks and mold for the past 6 months or so, but they're finally making some progress.  I've taken advantage of the time to decide what I could live without.  I figure I'll kill two birds with one stone.  I'll clear up room in my apartment and make some money by selling all the things I no longer want or need at my sister's next yard sale.  Whatever money I make from the sale I'll put to work in my investment plan.  Rather than having a lot of things collecting dust, I'll add shares of stocks to my investment account and collect dividends.

The restaurant where I work gave me a couple of Coca Cola clocks I intend to put in the sale.  I would have been happy making a few bucks, since they cost me nothing, but I've found out they're actually quite valuable.  If I sell them at the rummage sale I won't make as much as selling them on Ebay, but I should still do all right.  Whatever I make off them is pure profit. 

As soon as they repaint my old bedroom, I plan on making it my new home office.  I'm keep my bedroom on the north side of the building where it's more shaded during the hot summer months.  I have most of the furnishings, so I just need to pick up a writing desk and another filing cabinet.  I know a place near here where I should be able to get a good deal on used office furniture and should be able to get any office supplies I need with register rewards from Walgreens.  

It will be nice to get everything back to normal and get busy building my new investment portfolio and pursuing some of my other small business ideas.  2012 is beginning to look like a good year for me, we'll see how it goes. 

INVESTMENT PLAN 2012 UPDATE

I'm excited about my new investment plan for 2012.  If you haven't read my earlier posts, in a nutshell, I plan on purchasing shares in 50 additional dividend stocks paying quarterly dividends, with the goal of earning a dividend payment for every day of the year.

This week I received dividends from Advance America Cash Advance (AEA) and Centerpoint Energy (CNP).  I also deposited cash in my taxable account and my IRA.  I've put in orders to purchase the next 2 stocks for my accounts:  Exelon Corp. (EXC) for my taxable account and Clorox (CLX) for my IRA.  I figure it will take me 2 to 3 years to accumulate shares in 50 stocks, although that may be accelerated with the additional dividends I'll be picking up along the way.  Also, with the economy improving at a slight pace, it's possible I may find a better paying job during this time which will allow me to speed up the process.

I know most "experts" would advise against this, however I've never really had a great deal of luck following the "experts" advice, so I'm going with my own instincts on this one.  There have been times during my investment career when I've held shares in as many as 50 dividend stocks and I was amazed at how quickly those dividend payments added up.  With this plan, I will own nearly shares in almost twice as many stocks!  The rate of compounding on my investments will increase dramatically.  When I've reached my goal of 92 stocks, all the dividends payments will be used to build my positions, constantly increasing payouts.  If some of the companies should falter, I plan on replacing them with shares in other companies. 

If all goes well, when I retire I plan to draw only the dividend payments minus 10% which I'll reinvest to account for inflation.  Kind of an ultimate buy and hold strategy.  

WEEK IN REVIEW: STOCK DIVIDENDS, PURCHASES AND COUPON SAVINGS

This past week was kind of hectic for me.  We've been busy at work getting ready for a big corporate inspection on the 22nd.  On top of that, we've been busier than usual due to increased traffic from people who've gotten their tax refunds.  So it's been kind of crazy there.

On a brighter note, I collected several dividend payments.  In my taxable portfolio I received dividend payments from REIT O, limited partnerships LGCY, EVEP and SGU.  For my IRA account I collected dividends from SPY, T, DE and ABT.  Also purchased a stake in NYB for their current dividend yield of 7.72%.  While NYB may be somewhat risky, the price was right and the rewards in high yields and possible capital gains made it worth the risk for me.  

On my shopping trips this week, I continued to benefit from my version of extreme couponing.  I saved a handy 38% at the grocery store by matching coupons with sale items.  On my Sunday trip to Walgreens I saved close to 50% off my total purchases!  I also got 2 more chances to win $3,000 with their customer surveys.  It's been really great, since I've started couponing, to keep my house so well stocked with food, cleaning supplies and personal care items.  I have never had my home so well stocked in my entire life.  Coupons are the way to go.  I even save $25 on work I had done on my Honda Civic by using a coupon from the dealership.  

While I was at the Lake of the Ozarks for my annual February get away at Port Elsewhere, I made good use of coupons to buy food for the condo so I didn't have to go out to eat.  While there, I shopped for new shoes at the Nike outlet store and got an $80 dollar pair of Nikes for $21, almost 75% off!  All the savings from coupons and sale items are making it much easier to weather the slump in the economy and rebuild my investment portfolio after paying medical bills from my heart attack.  It also helps make it easier with ongoing medical bills for follow up care.  

PAYMENTS FROM UTILITY PORTFOLIO

Not long ago I wrote about adding utilities to my portfolio.  I've owned shares of CNP and Great Plains Energy for quite some time now.  However, with a goal towards increasing monthly cash flows and evening out monthly dividend payments, I decided to beef up my portfolio with high quality utility stocks. I've added Duke Energy (DUK), Wisconsin Energy (WEC) and Northeast Utilities.  With the dividend payment from Northeast (NU) in the month of March, I will have received payments from all three investments.  With these investments paying off each quarter, my next move will be to add shares in 3 additional utility companies paying in different quarters.  This will boost monthly dividends paid to my portfolio for each month of the year.  In the end I'll be collecting the same number of dividend payments each month.  Then it's really just a matter of boosting my holdings through dividend re investments and additional cash contributions to reach the ultimate goal of replacing my monthly from work.

As long as my health holds out, I plan to work at least another 10 years, so I've got quite a bit of time to build on my investments.  I'm already seeing the benefits of monthly income from dividends by the additional freedoms this allows.  I no longer have to work as much as I used to, or make as much from my job, to maintain my lifestyle.  Probably the best benefit of all is not worrying so much about money,  since I know that even when big expenses arise unexpectedly, the cash machine I've created from dividend stocks will eventually put me back in the black.

FEBRUARY OFF TO A GOOD START

The month of February is off to a good start for me.  With the stock market up and coupon savings at the grocery start of 47% this week, it's looking like a good month money wise.  I've been getting all my information together to file my tax returns and expect a modest refund.  The problems I've been having with my landlord regarding damages caused by a roof leak are nearing a resolution, so I should getting my apartment repaired soon and get things back to normal there too. 

I've had a lot of turmoil in my workplace related to turnover of employees and an upcoming corporate review.  While I don't deal as well as I should with changes in the workplace, I realize that fact and have resolved myself to roll with the punches, so to speak, and keep in mind that change can bring new opportunities.  So I'm concentrating on keeping myself open to new opportunity and keeping a positive outlook.  Ultimately I'm thankful to have a job at all when so many people are out of work.  Currently my working income represents the majority share of my monthly cash flow, so until my investment income overtakes that, I need to concentrate on keeping my employers happy.

I'm continuing work on my investment plan for the year and am considering opening a Roth IRA.  While contributions are not tax deductible, I like the idea of not being taxed on profits.  With contributions to my regular IRA making up only a small percentage of deductions to my taxes, I'm thinking that I would benefit more from future tax savings offered by a Roth account. 

Got some great coupons in the mail from Gerbes this week.  The mailers they send out are based on past purchases, so the coupons are for items I regularly purchase.  Some are entirely free and free is the ultimate goal of coupon shopping.  I'll be making good use of those along with the coupons I received from last weeks paper and register rewards from Walgreens.  All the money I save from couponing contributes toward building my investment portfolio and increasing monthly dividends.

MY INVESTMENT STRATEGY FOR 2012

After taking in to consideration the state of the U.S. and world economy I've decided to keep things simple for the first part of 2012 and invest in utilities.  I've written in earlier posts my reasons for believing utility companies will do well for the next few years, so I've picked out what I believe to be some of the best of the best to beef up the utility section of my portfolio and increase monthly cash flows.  Increasing monthly cash flow while keeping risk at a minimum is my biggest investment goal for the year. 

I'm still working on rebuilding my investment portfolio after the big payouts on health care from my heart attack.  Of course I still have the expense of ongoing care, with no insurance, but I've managed to keep expenses to a manageable level so far.  Things should be even easier as more of my old debts are paid off this year.  I should be entirely debt free by the end of 2012, which frees up money spent on debt for building my dividend stock portfolio.  I have already doubled my monthly cash investment and will continue to increase contributions as bills are paid off.

So the simple overall plan is pay off debt and buy utilities for 2012.  May not be the best of plans, but I'm sure I could do a lot worse. 

WEEK IN REVIEW...

I guess we can forget about the "Santa Rally" I talked about in my last post.  We had kind of a rollercoaster ride this week, up then down then back up, ending mostly flat for the week. 

I collected dividends from Centerpoint Energy (which I reinvested in more shares) and Realty Income Corp.  Otherwise not much activity in my personal accounts.

My MBCI store has generated some commissions for the month.  I've added a Garmin section and have been researching new items to add to the store.  Need to work on promotions to increase my commissions.  It would be nice to build up a steady stream of affiliate income.  Got to spend more time on that.

WILL WE SEE A "SANTA RALLY" THIS DECEMBER?

Some thought the gains we saw earlier in the week were the beginnings of a "Santa Rally."  However, with today's market stall, I believe it's unlikely.  I think people are jumping on any good news, or at least no bad news.  We all want to see the economy and the stock market revive, but I still don't think that will happen without significant improvement on the jobs front.  That being said, if we get a little good news and avoid any major economic issues, we may still see a rally by the end of the year.  I don't think it will last much past January.  I still believe the best bet is good dividend yields for the foreseeable future.  

From my own investment accounts I collected some nice dividend payments today from ConAgra, Aflac and Intel.  I believe all 3 have good long term prospects and I plan on holding/increasing my positions as part of my core portfolio.  I'll be reviewing my investment strategy and tweeking my financial plan for 2012.  While my current investment plan is working out well, there's always room for improvement.   

DIVIDENDS AND INTEREST FOR MY RETIREMENT ACCOUNT

Collected the first FDIC insured interest payment on the cash balance in my IRA account.  My investment company started offering the FDIC account option since money market rates have been so pitiful and I signed up for it right away.  As expected, the payment was nothing to get excited about, but it's that much more than I had.

Also collected dividends from SPY and CPB.  Reinvested the dividend in Campbell's Soup and kept the cash from SPY.  I believe these are the last two payments I'll get for the month of October.  Looking forward to the payouts in November from my holdings in energy limited partnerships.  I sold a large portion of my holdings in the partnerships to reduce exposure and collect on some of the capital gains, almost wish I'd held on to a few more units.  The cash payouts have been great!!!  But that's water under the bridge.  Don't plan on selling my remaining shares/units.  As it stands, I have taken all my initial investment, plus a substantial profit out of the 3 energy partnerships I have left.  So anything I collect now is icing on the cake.

UPDATING MY PORTFOLIO

Recently I made some changes in my IRA account.  I sold my stake in Astrazeneca (AZN) and used the proceeds to purchase shares of Deere & Company (DE), Westar Energy (WR) and added more shares of Great Plains Energy (GXP).  AZN's prospects for increasing earnings per share looked kind of bleak, so the prospects of continued dividend growth seemed kind of slim.  So I sold the shares while I was showing an overall profit and reinvested the money with the above named companies who's earnings and dividends are more likely to increase over the next 5 years.  These companies are dividend plays with some potential for growth and are all part of my long-term holdings in my retirement account.

As for my taxable investment account, I plan to purchase shares of Duke Energy (DUK), Northeast Utilities (NU) and Wisconsin Energy (WEC) as funds become available.  Right now I'm a little short on cash due to ongoing medical bills related to my heart attacks last year.  So my cash contributions to this account have been quite small, although I do contribute additional funds on a monthly basis.  The money available for new stock purchases is coming mostly from dividend payments, so there's been less activity in this account than in my IRA.  After Friday's run up in the stock market they're both doing quite well.  If the economy picks up after the first of next year, as I expect, then I should see some nice gains on shares purchased during the downturn in both accounts.

I recently received an investment newsletter in which the author was promoting an investment strategy quite similar to my own.  In the article she pointed out how her portfolio of dividend stocks was paying out a monthly payment from $1,100 to $1,500 per month after only 5 years.  Of course she had a total of around $200,000 invested.  Way more than I have now, but the principle is the same.  My dividend payments go up every month from the dividends I reinvest from the previous months and from additional cash contributions on my part.  It's really only a matter of time before my own portfolio of dividend stocks are paying as much or more than I will receive in Social Security each month upon retirement.  It's a simple matter of having a plan and sticking with it.

COULD UTILITIES BE THE BIG WINNERS FOR 2012?

The Federal Reserve is pledging to keep short-term rates near zero until at least mid-2013, which is good news for companies who rely heavily on borrowed funds, including utilities.  In economic downturns most people still try to maintain lights and heat/air conditioning to their homes and businesses.  So while other companies may see a drastic reduction in sales, this is not often the case for utility providers. 

With some measure of guaranteed cost reductions from lower interest rates and reduced fuel costs, utilities should benefit over the next few years.  Investors should benefit as well, since utility companies are required by law to pass along a certain percentage of profits to shareholders in the form of dividend payments. 

While no one can predict where the market is headed, I think a good case could be made for utilities coming out as the big winners of the current economic turmoil.

NEW MONTH, NEW LOWS FOR THE STOCK MARKET

The month of October started out on the downside for the stock market Monday and given the performance in the Asian markets overnight, I think we'll see more of the same today.  My accounts started the month off with a nice dividend payment from Reynolds American (RAI:NYSE).  Their current dividend yield is 5.67% with an annualized dividend of $2.12 per share.  RAI is one of my long term investments.

Looking ahead for the market, I'm expecting October to be much like the month of September with continued weakness in share prices.  I'll be busy adding to some of my current positions while prices are down.  I expect to continue buying through at least the end of this year.  I think stock prices are cheap and it's a good opportunity to beef up some of my long term investments, so I'm not as active in searching for new investments.

THEY MIGHT NOT MAKE MONEY BUT YOU STILL MIGHT HAVE TO PAY TAXES

Just finished reading a new prospectus from one of my former holdings, which only convinced me that I was right to get rid of my shares.  Prospectuses can be a slow read to say the least, but this one really took the cake.  It involved the same list of investment risks as other prospectuses normally contain, but was written in such a way as to imply the company has never really made any money,  they don't really try very hard to make shareholders any money, but you still may have to pay taxes on distributions as if you had made money.  Granted, paying taxes on some fund distributions even though you've actually suffered a loss, is not unheard of.  However, the blatant way in which these guys came right out and said they weren't really trying to make shareholders any money and were still going to charge a management fee, is either the height of honesty or audacity, I'm not sure which.  Glad it's no longer part of my investment portfolio. 

BUYING SHARES OF MERCK & CO. INC.

It's been a slow investment week for me, although I did put in an order to purchase shares of Merck & Co. Inc. (MRK) for my IRA account.  Their price is down from the 52 week high of $37.68, their current price being $34.55.  With the economy and the stock market slowing I thought now would be a good time to pick up shares.  They have a current dividend payout of $1.52 which represents a 4.40% payout on their current price per share.  While they stand to lose some in sales due to expiring patents I believe the earnings per share will still be good going forward, with their strong Research and Development Department and share repurchases.  

I've owned shares of Merck before in my taxable account and made a tidy profit, both from dividends and capital gains.  This time around I'm taking a buy and hold approach, so I'll be investing for the long term.   

INVESTMENT WEEK IN REVIEW

The stock market finally ended it's weeks long losing streak by closing higher on Friday.  Was not a very busy week for my investment accounts.  I collected dividends from Calamos (CHY) and Realty Income Corp. (O) and added more shares to my stake in Great Plains Energy (GXP).  Otherwise it's been a pretty slow week for me. 

I'm sticking with my plan of reinvesting all dividends automatically until the current correction in the market has run its' course.  When it begins to look like we're on an upward swing, I'll reset my account to have dividends paid in cash.  In the mean time I'll be adding to all my holdings while the prices are low. 

WEEK IN REVIEW

Friday the 13th proved unlucky for the stocks as the markets closed lower for the week.  As for my personal portfolio, my cash balances ended up, thanks to good dividends from Clorox and a final dividend payment from British American Tobacco.  Managed to avoid the crash in commodities prices, mostly by avoiding commodities investments altogether.  Though I did auction off a collection of silver coins while the price of silver was near it's all time highs.  I've never been a coin collector and I'm kind of like Warren Buffett when it comes to gold and silver as investments.  Warren says gold is pretty to look at but not much else.  I much prefer investments that generate a steady stream of income through dividend payments over speculation in commodities prices.

According to a new report, Social Security is expected to run out of money by 2036, not good news for anyone in the U.S., but if I manage to live that long, I'll be in my mid 70's and should have enough dividend income to cover my expenses. 

Right now I'm enjoying the lower gas prices while they last.  Of course most everyone agrees that gasoline prices reach the demand destruction around $4 per gallon, so you kind of had to see it coming.  Volatility in the U.S. dollar, however, is causing price fluctuations in the oil market since oil is priced in U.S. dollars. 

I watched an interesting video on CNBC about manufacturing making a comeback in the United States.  I'd sure like to see it, but I'm a bit skeptical.  I can remember a time when factory jobs were plentiful and easy to get, now it seems they're few and far between.  I would like to see "Made in the U.S.A" make a comeback though.  What a great thing that would be!

THREE STOCKS THAT PAY DIVIDENDS EVERY MONTH!

Want to create your own cash machine without having to keep track of a lot of different stocks?  How about 3 stocks that pay monthly dividends.  When it's all about creating cash flow, you can hardly beat stocks with monthly payouts.  Here are 3 that I believe will do well and have invested in for the long term:

1.  Gas Natural Inc. (EGAS) formerly Energy, Inc., distributes natural gas in Maine, North Carolina, Wyoming and Montana.  Founded in 1909, the stock pays a dividend yield of 5.1% with a price to earnings ratio of 7.03.

2.  Realty Income Corp. (O), a real estate investment trust, has been around since 1969.  They specialize in commercial retail real estate.  Their dividend yield is 5.1% and the stock trades at 16.9 times forward earnings.

3.  Calamos Convertible and High Income (CHY) has a fairly high yield of 8.2%, however, the management fee is a little on the high side at 1.13%.  Trading at about a 1.5% discount to net asset value, this CEF, founded in 2003, invests in high yield fixed income securities and convertible securities.

(I currently hold shares of EGAS in my IRA account and have positions in O and CHY in my regular taxable investment account.)

AGNC NEWEST ADDITION TO STOCK PORTFOLIO

Looking to boost overall cash flow from dividends I've decided to add American Capital Agency Corp (AGNC: NASDAQ) to my taxable investment account.  AGNC is a real estate investment trust which earns income primarily from investing in residential mortgage pass-through securities and collateralized mortgage obligations. These investments consist of securities, for which the principal and interest payments are guaranteed by United States Government-sponsored entities, such as Fannie Mae and Freddie Mac or by a United States Government agency, such as Ginnie Mae. The Company is externally managed by American Capital Agency Management, LLC, a subsidiary of a wholly owned portfolio company of American Capital, Ltd.

AGNC has a price to earnings of 4.01 with a ROE of 34.17.  They have earnings per share of $6.84 with a dividend of $5.60, which represents a return of 19.55% on their recent share price of $28.64.

I have to admit a bit of trepidation about investing in AGNC after previous experiences with REITs.  However their reported earnings seem to indicate support for their current dividend and their share price has remained fairly stable during the past year, with their 52 week high being $30.09 and their 52 week low of $23.61.  Since the total initial investment I'll be making is a small fraction of my portfolio, I believe the risk is acceptable for current returns.  The fact that they've managed to thrive during one of the worst economic downturns in this writers memory is yet another positive as far as I'm concerned.